Apple reported $366 billion in revenue for fiscal year 2020, up 33.6% from the $274 billion they reported for 2020. They reported a net income of $94.7 billion for the year, after $271.3 billion in expenses.
Of Apple’s revenue, $297.3 billion came from the sale of devices – 81.2% of Apple’s total revenue for the year. $192 billion of that came from iPhone sales alone, comprising 52.4% of Apple’s total revenue. The rest includes $35.2 billion in Mac sales, $31.8 billion in iPad sales, and $38.3 billion in other hardware, such as wearables and smarthome devices. iPhone sales were up $54.2 billion from 2020, making it the highest growth area for Apple in 2021.
The remaining $68.4 billion in revenue came from services, such as the App Store, Apple Music, and iCloud. This category grew $14.6 billion from 2020.
Apple’s $271.3 billion in expenses for 2021 includes $213 billion in total cost of sales, leaving a gross margin of $152.8 billion. They reported $43.9 billion in operating expenses, including $21.9 billion spent on research and development, as well as another $22 billion spent on other administrative expenses. Finally, they provisioned $14.5 billion for income taxes.
You can read more in Apple’s full earnings report for Q4 2021.
How Apple Makes Money
At its heart, Apple is both a hardware and a software company. The two are inextricably linked for Apple: you cannot buy an iPhone without iOS, nor can you buy iOS without an Apple product. The $297 billion Apple makes off devices, then, is ostensibly from hardware sales. But because Apple integrates its software so closely into all its devices, that money comes just as much from selling software.
No single product defines Apple quite like the iPhone: as of 2021, it drives over half of Apple’s total revenue. But for its first 30 years, Apple was a computer company. On that front, it lagged behind its competitors in the 1990s. And today, Mac sales account for less than 10% of Apple’s revenue.
With the debut of the iPhone, Apple embarked on a stunning growth spree, from $25.6 billion in revenue in 2007 to $233.7 billion in 2015. That growth slowed in the late 2000s, but surged again last year: Apple’s revenue grew $90 billion from 2020 to 2021, their best year yet.
Services comprise another growing segment of Apple’s pie chart. Most notably, this includes App Store revenues. Apple takes a cut as high as 30% on transactions in iOS apps – a figure that has lately drawn criticism from developers and scrutiny from anti-trust regulators.